EUROPE POWERED THE BRAND'S COMEBACK. BUT THE TURNAROUND ISN'T COMPLETE UNTIL U.S. SHOPPERS BUY IT

Heinz Krogner, Chief Executive of clothing designer and retailer Esprit, is one of the world's great turnaround artists. A decade ago, Esprit was a declining casual-clothing business. But Krogner rebuilt Esprit into one of the fastest-growing apparel retailers. Sales in the past fiscal year, which ended in June, probably topped $3 billion, nearly triple its revenues in 2001. In those five years, Esprit's market value has increased eightfold, to more than $10 billion, roughly on a par with Limited Brands and almost twice the size of Abercrombie & Fitch.

The comeback story, however, has had an ironic wrinkle: the U.S., where Esprit...